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Sarantel www.sarantel.com/

Sarantel’s revolutionary ceramic filtering antennas offer dramatically improved performance over existing antenna designs, resulting in a clearer signal, better range and a 90 per cent reduction in the amount of signal radiation absorbed by the body.

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Sarantel says recent orders will have material impact on second half revenue

Specialist GPS antenna maker Sarantel Group (LON:SLG) today said that recent orders will have a material impact on second half revenues and beyond.

In a trading update, for the six months to March 31, it revealed first half revenues of £0.9 million (H1 2011: £1 million). And it said it had a cash balance of £0.2 million at the end of the period, though an additional £165,000 tax credit was received this month.

Sarantel says production revenues increase 9 per cent helped by ‘significant’ growth in the military market. But development revenues had decreased at the same time.

Its performance in the military market continues to build momentum, as demonstrated by a ‘substantial’ order from a military radio manufacturer in February this year. This is part of a multi-year deal which, along with other recent orders, is expected to have a material impact on revenues going forward.

Sarantel also added that with the support of a major customer it has secured a £2 million loan from HSBC Bank, which will help revenue growth.

"The military contracts we have secured underscore Sarantel's position as a supplier of leading antenna technology,” said chief executive David Wither.

“With our recently agreed loan in place, and a firm order book of just over £2m compared to £400k this time last year, we look forward to strong growth in revenues for the second half of the financial year."

On AIM Sarantel shares gained around 3.5 per cent following this morning’s update to trade at 0.59p a share.

XCap analyst Tim Freeborn was also buoyed by the statement. And he says Sarantel is on track for much better days.

“The growing order book is the key here,” Freeborn said in a note to clients. 

“This has let Sarantel obtain debt finance from HSBC which means it should reach profitability without having to tap shareholders again.

“Yes, we are the house broker, but we took on the company because we believe the £40m+ it has swallowed is about to start showing a return. Progress in the consumer mass market will send the numbers through the roof.”

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